Domestic IT firms see big bucks in Railways

By SiliconIndia   |   Thursday, 28 February 2008, 05:30 Hrs   |    4 Comments
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Bangalore: Pursuing a $250 to $500 million business deal, Indian IT firms have evinced a keen interest in participating in the multi-crore technology upgrade plans of the Indian Railways announced today.

To ensure customer satisfaction, railways are planning to invest Rs 250,000 crore over the next five years to expand its network and modernize and upgrade the technology. And consequently, investment in IT projects will be increased to several thousand crore rupees over the next five years, said Railway Minister Lalu Prasad.

A major part of this investment will be in the nature of public-private partnerships (PPPs). Such a prospect was visible when the IT index rose 1.8 percent on the Bombay Stock Exchange (BSE).

IT firms like Satyam Computer Services, for instance, see a Rs 1,000-2,000 crore opportunity in the technology upgrade of the railways. Other IT firms like Infosys, Tata Consultancy Services (TCS), and Wipro too stand to bag sizeable deals.

Moreover, a security equipment manufacturers like Zicom (up 5 percent on the BSE) and Bartronics (up 8.5 per cent on the BSE) could get orders for surveillance equipment installation and smart cards and radio frequency identification tag (RFID) projects, respectively. Zicom has already installed closed circuit TVs (CCTVs) at select railway stations on Western Railway.

IT applications will focus on three core areas - freight service management, passenger service management and general management. Modern technologies like geographical information systems (GIS), global positioning systems (GPS) and RFID will be applied progressively.

"As a company, we are doing request for proposals (RFPs) with the Indian Railways in the areas of asset management, usage of RFID, and use of kiosks and portals. It is very early to put numbers to the contract size. But assuming these deals will be for a period of 5-10 years, the opportunity could be in the size of Rs 1,000-2,000 crore," said Ranjan Tayal, India Head, Satyam.

S Venkatramani, VP and head (India operations), TCS, said: "The railways have been on a transformational path and this budget continues the momentum. The thrust on PPP schemes for upgrading workshops and others will see IT firms in a much more broader role."

Wipro Infotech (the Middle East, India and Asia-Pacific IT business of Wipro Technologies) too had identified the Indian Railways as a key strategic account for the last several years.

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